It seems like the tide of public opinion on cash for clunkers has turned heartily to the negative in recent days. That is, outside of vapid local TV news programs, which all seem to be running boilerplate stories that barely address the real effects of cash for clunkers.

As stimulus, cash-for-clunkers means lemons for taxpayers. It would borrow billions of dollars to benefit a single industry and a particular class of consumers who decided years ago to buy fuel-inefficient vehicles.

For most “clunker” drivers, it’s not as though they had wads of cash and were able to choose from a wide range of fuel-efficient, safe, modern cars. Instead, limited budgets meant they had to select an older, possibly fuel-inefficient vehicle. Or they simply didn’t care much for the new cars on the market today. And as we’ve said several times before, though these people are targeted by this bill, they are not the types of people who will want to or even be able to take on a new car loan and payment schedule.

The Administration and Energy and Commerce Committee proposal excludes a vehicle repair option. In a letter to members of Congress, the Automotive Service Association (ASA) pointed out: â€œASA members are small businesses all across America, actively engaged in their communities, employing a tremendous number of technicians and office personnel. A fleet modernization program without a repair option could be devastating to independent repairers. Arbitrarily removing older vehicles from Americaâ€™s highways would take vehicles out of independent repair bays, costing jobs and potentially closing small businesses. A repair option tied to higher-emitting vehicles is the most cost-efficient, consumer-friendly approach to a fleet modernization program.Â This option would also allow low-income vehicle owners who donâ€™t have the resources for a new vehicle to now have a dependable, lower-emission vehicle.â€

ASA argues that any Cash for Clunkers Program should:
â€¢ include a vehicle repair option for consumers;
â€¢ be administered by the states;
â€¢ tie vehicle participation to emissions and improving air quality; and
â€¢ provide sufficient repair cost allowances to address emissions repairs.

It makes sense – repairing a vehicle costs less than replacing it, repairing a vehicle uses far less energy than replacing it, and the vehicle’s natural life and usage is extended. Of course, it doesn’t help the car companies (or the insurance companies, or Congress’s greenwashing attempt), so I’d not be surprised if Congress completely ignored the possibility of a repair option.

“One would think that Congress would have learned a lesson from the recent home mortgage mess,” says Automotive Recyclers Association’s (ARA) Executive Vice President Michael E. Wilson. “Pushing consumers into vehicles that they cannot afford is not good for anyone – most of all the American taxpayer.” Wilson added, “The recovery, reuse, and resale of these quality recycled parts must remain readily available to the consumer, who may not want or be able to financially retire their vehicle, and will require access to parts from these vehicles for their future repairs.”

* SEMA has also made another statement on c4c, siding with the ARA on allowing drivetrains to be spared the crusher. Full press release:

WASHINGTON, D.C. (May 12, 2009) â€“ The Specialty Equipment Market Association (SEMA) urged Congress to include two additional provisions to controversial legislation that would provide a government voucher to consumers who buy a new car in exchange for scrapping a less fuel-efficient vehicle. The provisions would 1) require that scrapped vehicles be less than 25 years old and 2) permit the engine and drive train to be recycled if they have been disassembled.

The recommendations were proposed in a letter to the Congressional leadership as lawmakers finalize an accelerated vehicle retirement program known as â€œcash for guzzlers.â€ While SEMA has supported vouchers toward the purchase of fuel-efficient new vehicles as a mechanism to direct new car sales to the automakers and dealerships, the association has steadfastly opposed tying these vouchers to a vehicle scrappage requirement. SEMA offered the amendments as a means to improve the legislation.

Under the draft legislation currently circulating in Congress, the program would last up to one year and potentially scrap one million older cars and trucks. The scrapped vehicle must get less that 18 mpg (15 mpg for heavy pick-ups and vans). The car buyer would receive a $3,500 voucher if they bought a new passenger car that was at least 4 mpg higher than the older vehicle, or a new pickup truck/SUV that was at least 2 mpg higher than the old truck. They would receive a $4,500 if the passenger car was at least 10 mpg higher and the truck/SUV was at least 5 mpg higher. The program would mandate that the engine block and drive train be destroyed.

â€œSEMA is working with lawmakers to mitigate some of the legislationâ€™s unintended consequences and its potential damage to the automotive aftermarket,â€ said Chris Kersting, SEMAâ€™s President & CEO. â€œThese commonsense proposals will make sure the government is not spending $3,500 or 4,500 on a vehicle that may only be worth a few hundred dollars but may have potential value to vehicle collectors and to promote the benefits of parts recycling.â€

A vehicle that is 25 years old or older is rarely driven, does not contribute to the nationâ€™s dependence on foreign oil, and is worth far less than the government voucher. A 25-year exclusion would also guarantee that older cars that have an historic or aesthetic value are not inadvertently crushed. These vehicles are valued by hobbyists or may be a source of recyclable parts for use on restoration projects.

The letter to the Congressional leadership noted that recycling the engine and transmission is environmentally sensitive. â€œIf the legislation simply requires that the equipment be disassembled as the vehicle is scrapped, it would fulfill lawmakersâ€™ intent to prevent an engine/drive train from being directly installed into another vehicle,â€ Kersting added. â€œThe responsible recycling of parts is a better solution for preserving natural resources and reducing CO2 emissions than crushing the equipment.â€

Rebuilt engines require an estimated 80% less energy to produce than a new engine and cost 30-50% less since the core has been salvaged. Critical internal parts are replaced so the final rebuilt product is one that meets or exceeds original equipment performance standards. The engine/transmission can even surpass new car technology with the simple addition of new-technology retrofit equipment.

SEMAâ€™s recommendations are intended to reduce the damage a vehicle scrappage program would impose on thousands of independent repair shops, auto restorers and recyclers, customizers and their customers across the country. SEMA will continue to promote alternative incentive programs that will help clean the environment, provide for vehicle and parts recycling, and preserve collector cars for future generations.

Once again the local media outlets are scrambling for “stories that effect your wallet.” I ran into this alot back in the day..
“We need more stories that people can relate to..the focus groups tell us this..” Crikeys…